Apple bashes Amazon and proposed ebook settlement
In a memo filed with the Southern District of New York this afternoon (PDF; embedded below), Apple argues that the Department of Justice's proposed settlement with three book publishers forces Apple to tear up existing contracts.
Context & Ripple Effects
Apple’s filing extends a dispute that had already produced a July appeal urging the DOJ to drop its e-books suit. Its objection is consequential because Apple says the proposed publisher settlement reaches into existing commercial contracts, rather than simply ending a case for the settling parties.
First-order effects
- Apple must contest a remedy it says would require changes to its existing publisher agreements.
- The three publishers face a proposed DOJ settlement whose terms Apple argues would reshape contracts beyond the settling parties.
Second-order effects
- The settlement process becomes a fight over the commercial rules governing e-book distribution, not only over the publishers’ resolution with the DOJ.
- Amazon is drawn further into the dispute as Apple frames the proposed remedy against the competitive position of a major e-book retailer.
Third-order effects
- If antitrust settlements require platforms to unwind related agreements, negotiated remedies can set operating rules for markets even without a final merits ruling.
- The case points to settlement terms becoming a form of competitive standard-setting in digital content distribution.
The trend: Antitrust remedies are becoming a mechanism for setting the contractual rules that govern platform competition in digital media.